Various mechanisms for transfer of ownership between a buyer and seller include in-kind exchanges, trading, bartering, direct selling and auctioning. However, with the advent of the Internet and the development of new marketing systems, the world of commerce has changed dramatically for small and large companies as well as individual entrepreneurs. The Internet offers buyers and sellers a global marketplace in which they may actively participate in the transfer of ownership of any asset. As a result of the proliferation of on-line sales thru the Internet, doing business is being profoundly impacted through such means as easily attained affiliations with other business entities over the Internet. For example, an individual entrepreneur can quickly open an online super mall on the Internet, with little to no investment, save for the time to get a web site up and running.
While some electronic commerce have adopted conventional brick-and-mortar models, other businesses; such as E-bay, Priceline, and Mercata have devised new business models for transacting business over the Internet. For example, E-bay offers a Consumer-to-Consumer (C2C) model to buyers and sellers over the Internet. The E-bay model facilitates transfer of ownership through various “auction” models, such as standard auctions, reverse auctions, and Dutch auctions. Generally, consumer sellers post items on an E-bay administered system, which offers a web-site that allows consumer buyers to log on search (browse) for various auctioned items. The E-bay system allows sellers to post a description and picture of the auctioned items on the web site. The system then schedules auctions for the items and presents the forum for accepting bids. The consumer buyers, which can search for the auctioned items by categories or other criteria, e.g., manufacturer, etc., place bids for specific auction items during specified auction periods. While the auction is in progress, the system allows the buyers and sellers to view the bids. The bidders are also given the opportunity to increase their bids during the process. At the end of the timed auction, the highest bidders are given the right to purchase the auctioned items for corresponding bid amounts.
Under the e-bay model, the sellers receive the highest bid amount minus a commission that ranges between 1%-6% of the sale price. The buyers pay cash considerations to the sellers. It has been observed that the E-bay model works better with lower priced items than higher prices items, primarily because the consumer demand for auctions reduces as the price of the auctioned items increases.
Mercata offers a Business-to-Consumer (B2C) model that aggregates consumer buyers who wish to purchase goods or services form sellers, which are primarily such businesses as distributors, manufacturers, or service providers. This model takes advantage of the aggregate buying power of pools of buyers to reduce purchase price. In addition to buyers, the aggregate model has also been applied to pools of sellers. Therefore, aggregators, such as Mercata, facilitate the transfer of ownership through aggregate buying or aggregate selling. The more aggregate participants, i.e., buyers or sellers, the lower is the purchase or sales prices become. However, under this model, the consumer buyers generally pay near the fall value of the goods or services.
Priceline also offers a Business-to-Consumer (B2C) model over the Internet. The Priceline model facilitates the transfer of ownership through a model that has become known as “Name Your Price.” Essentially, this model offers certain categories of goods or services, e.g., airline tickets, to buyers from seller who sell excess inventory for less than retail price.
However, there still exists a need for a system that can utilize the Internet for other types of sale transactions or promotional purposes.